LAPL Automotive Ltd Management Discussions

OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factor.

BUSINESS OVERVIEW

Our Company is an integrated automotive components manufacturer operating across ODM (Original Design Manufacturing) and OBM (Original Brand Manufacturing) models, with a diversified product portfolio spanning automotive lighting systems, mirrors, and plastic moulded components. Our Company caters to automobile OEMs across passenger vehicles, commercial vehicles, two-wheelers, and electric mobility segments. With a diversified product portfolio, our company caters to the products of tail lamps, front and rear indicators, reflex reflectors, head lamp, stop lamp, position lamp, reverse lamp and roof lamp, etc., the motor segments covers starter motor, wiper motor, rotors etc. and other components and accessories segment such as hood, stators, small BLDC fans and many more for various spectrum of vehicles.

Our Company was incorporated by our promoter Mr. Neeraj Goyal in the year 2004, by acquiring the manufacturing unit of Lumax Auto Private Limited situated at Plot No. C-241, MIDC Waluj, Aurangabad, Maharashtra, 431133 (hereinafter known as "Unit-I") from Lumax Auto Private Limited through an agreement dated February 08, 2005. We have 3 manufacturing facilities, including Unit-I, Plot No. L-18/15, MIDC Waluj, Aurangabad (hereinafter known as "Unit-II") and Plot No. 90, Sector 5, Auric City, Shendra, Aurangabad (hereinafter known as "Unit-III").

We have consistently grown in terms of our revenues over the past years our revenues from operation were 6,073.48 lakhs in F.Y.2023-24, 6,597.53 lakhs in the FY 2024-25 and 9,325.17 lakhs in the FY 2025-26. Our Net Profit after tax for the above- mentioned periods are 217.37 lakhs, 503.45 lakhs and 862.69 lakhs respectively.

FINANCIAL KPIs OF THE COMPANY (Amount in Lakhs except % and ratios)

Particulars	LAPL Automotive Limited
	Fiscal 2026	Fiscal 2025	Fiscal 2024
Revenue from Operations ( in Lakhs) (1)	9,325.17	6,597.53	6,073.48
Growth in Revenue from Operations (%)	41.34%	8.63%	1.10%
Total income (2)	9,431.54	6,707.28	6,103.39
EBITDA ( in Lakhs) (3)	1,579.57	993.59	537.66
EBITDA Margin (%) (4)	16.75%	14.81%	8.81%
Profit After Tax ( in Lakhs) (5)	862.69	503.45	217.37
PAT Margin (%) (6)	9.25%	7.63%	3.58%
Net worth (7)	2,525.28	1,662.59	1,159.14
Return on Equity ("RoE") (%) (8)	41.20%	35.68%	20.69%
Return on Capital Employed ("RoCE") (%) (9)	34.38%	30.85%	21.65%
Net Asset Value Per Share (Post bonus) ( ) (10)	28.70	18.89	13.17
Debt- Equity Ratio (11)	0.83	0.95	1.15

Notes:

(1) Revenue from operations represents the revenue from sale of service & product & other operating revenue of our Company as recognized in the Restated financial information.

(2) Total income includes revenue from operations and other income.

(3) EBITDA means Earnings before interest, taxes, depreciation and amortization expense, which has been arrived at by obtaining the profit before tax/ (loss) for the year / period and adding back interest cost, depreciation, and amortization expense.

(4) EBITDA margin is calculated as EBITDA as a percentage of total income.

(5) Restated profit for the period / year margin is calculated as total income less total expenses.

(6) PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations.

(7) Net worth means aggregate value of the paid-up equity share capital and reserves & surplus.

(8) RoE is calculated as Net profit after tax divided by Average Equity.

(9) Return on capital employed calculated as Earnings before interest and taxes divided by capital employed as at the end of respective period/year. (Capital employed calculated as the aggregate value of total equity, total debt and deferred tax liabilities)

(10) NAV per share is computed as the Total Equity divided by the outstanding number of equity shares.

(11) Debt- equity ratio is calculated by dividing total debt by total equity. Total debt represents long-term and short-term borrowings. Total equity is the sum of share capital and reserves & surplus.

FACTORS AFFECTING OUR RESULT OF OPERATIONS

Except as otherwise stated in this Red Herring Prospectus and the Risk Factors given in the Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

1. We are dependent on a few customers for a significant portion of our revenues. Further we generally do not enter into long-term arrangements with our customers and any failure to continue our existing arrangements could adversely affect our business and results of operations.

2. Changes in focus or change in Government Policies towards Auto Components Industry.

3. Any failure to compete effectively in the highly competitive global industry of high precision and critical components manufacturing could have a material adverse effect on our business, results of operations, financial condition, cash flows and future prospects.

4. The markets in which our customers compete are characterized by sectors specific to the industries which we cater to, and their rapidly changing preferences and other related factors including lower manufacturing costs. Accordingly, we may be affected by any disruptions in the industry which can adversely impact our business, financial condition, results of operations, cash flows and prospects.

5. Our business is working capital intensive. Any insufficient cash flows from our operations or inability to borrow to meet our working capital requirements, it may materially and adversely affect our business and results of operations.

6. Our Inability to Attract, Retain and Recruit Experienced Middle Management Personnel May Adversely Affect Our Business Operations and Growth Prospects.

7. The majority of our product sales is concentrated in the region of Maharashtra. For Fiscal 2026, 2025 and 2024 our revenue from sale of products in Maharashtra accounted for 86.10%, 82.90%, and 82.90% of our revenue from operations, respectively any adverse developments affecting our sales in these regions could have an adverse impact on our business, financial condition, results of operations and cash flows.

8. The majority of our product sales comes from Top 1 Customer. For the Fiscal 2026, 2025 and 2024 our revenue from sale of products to top 1 customer is accounted for 77.18, 76.82% and 76.90% of our revenue from operations, respectively any adverse developments affecting our sales.

9. We rely on third-party suppliers for raw materials, plant, machinery, and components on a purchase-order basis. Any failure or delay in supplier performance, supply disruptions, or price volatility may materially adversely affect our business, results of operations, financial condition, cash flows, and future prospects. 10. Changes in laws and regulations that apply to the Auto Components Industry in which we operate;

11. Our Company has some instances of non-compliances and delayed in compliances with some statutory provisions of the

Companies Act 2013 and delayed compliance may attract penalties against our company which could impact the financial position of us to that extent. 12. There have been some instances of delays in filing of statutory forms and regulatory dues in the past with the various government authorities.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING AND PREPARATION OF RESTATED FINANCIAL STATEMENTS

The restated summary statement of standalone assets and liabilities of the Company as at March 31, 2026, March 31, 2025 and March 31, 2024 and the related restated summary statement of standalone profits and loss and cash flows for the year ended March 31, 2026, March 31, 2025 and March 31, 2024 (herein collectively referred to as ("Restated Summary Statements") have been compiled by the management from the audited standalone Financial Statements of the Company for the years ended on March 31, 2026, March 31, 2025 and March 31, 2024 approved by the Board of Directors of the Company. Restated Summary Statements have been prepared to comply in all material respects with the provisions of Part I of Chapter III of the Companies Act, 2013 (the "Act") read with Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations") issued by SEBI and Guidance note on Reports in Companies Prospectuses (Revised 2019) ("Guidance Note"). Restated Summary Statements have been prepared specifically for inclusion in the offer document to be filed by the Company with the BSE in connection with its proposed SME IPO. The Company’s management has recast the Financial Statements in the form required by Schedule III of the Companies Act, 2013 for the purpose of restated Summary Statements.

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles in India.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current non-current classification of assets and liabilities.

a) USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

b) PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS

i. Property, Plant & Equipment

All Property, Plant & Equipment are recorded at cost including taxes (Excluding recoverable in nature), duties, freight and other incidental expenses incurred in relation to their acquisition and bringing the asset to its intended use.

ii. Intangible Assets

Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

c) DEPRECIATION / AMORTISATION

Depreciation on fixed assets is calculated on a written down value using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act, 2013.

Intangible assets including internally developed intangible assets are amortised over the year for which the company expects the benefits to accrue.

Intangible assets are amortized on straight line method basis over 3 years in pursuance of provisions of AS-26.

d) INVENTORIES

Inventories comprise of Raw material, Consumables, stores & spares, Packing material, Work-in-Progress & Finished Goods. Raw materials, Consumables, stores & spares, packing material are measured at the lower of cost and net realizable value. The cost of Raw materials, Consumables, stores & spares, packing material are based on the first-in-first-out method principle. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of raw material, consumable, stores & spares, packing material includes purchase cost and allocation of indirect costs incurred in bringing the inventory to their present location and condition.

Finished goods and work-in-progress are valued at lower of cost and net realizable value. The cost of finished goods and work-in-progress includes raw material costs (net of recoverable taxes), direct cost of conversion and proportionate allocation of indirect costs incurred in bringing the inventories to their present location and condition.

The provision for inventory obsolescence is assessed regularly based on estimated usage and shelf life of inventory

e) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.

f) INVESTMENTS

Non-current investments are carried at cost less any other-than-temporary diminution in value, determined on the specific identification basis.

Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment, determined individually for each investment. Cost of investments sold is arrived using average method.

g) FOREIGN CURRENCY TRANSLATIONS

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Any income or expense on account of exchange difference either on settlement or on translation at the balance sheet date is recognized in Profit & Loss Account in the year in which it arises.

h) BORROWING COSTS

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognized in Statement of Profit and Loss in the period in which they are incurred.

i) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

j) REVENUE RECOGNITION

Revenue from sale of goods is recognized when the goods are dispatched to the customer which coincides with the transfer of risk and rewards in the goods. The sales are recorded at invoice value, net of taxes.

Revenue from services is recognized proportionately by reference to the performance of each act. Revenue is only recognized when it can be reasonably measurable and at the time of rendering of the services it would not be unreasonable to expect ultimate collection.

k) OTHER INCOME

Interest Income on fixed deposit is recognized on time proportion basis. Other Income is accounted for when right to receive such income is established.

l) TAXES ON INCOME

Income taxes are accounted for in accordance with Accounting Standard (AS-22) "Accounting for taxes on income", notified under Companies (Accounting Standards) Rules, 2021. Income tax comprises of both current and deferred tax.

Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization.

m) LEASES

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of Profit and Loss on systematic basis over the lease term.

n) CASH AND BANK BALANCES

Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed Deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Other Bank Balances are short-term balance (with original maturity is more than three months but less than twelve months).

o) EARNINGS PER SHARE

Basic earnings per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity share outstanding during the year. Diluted earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

p) EMPLOYEE BENEFITS

Defined Contribution Plan:

Contributions payable to the recognized provident fund, which is a defined contribution scheme, are charged to the statement of profit and loss.

Defined Benefit Plan:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service without any monetary limit. Vesting occurs upon completion of five years of service. Provision for gratuity has been made in the books as per actuarial valuation done as at the end of the year.

q) SEGMENT REPORTING

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".

RESULTS OF OUR OPERATIONS

Based on Financial Statements of Profit & Loss as Restated

						(Amount in lakhs)
Particulars	For the year ended March 31, 2026	% of Total**	For the year ended March 31, 2025	% of Total**	For the year ended March 31, 2024	% of Total**
INCOME
Revenue from Operations	9,325.17	98.87%	6,597.53	98.36%	6,073.48	99.51%
Other Income	106.37	1.13%	109.75	1.64%	29.91	0.49%
Total Revenue (A)	9,431.54	100.00%	6,707.28	100.00%	6,103.39	100.00%
EXPENDITURE
Cost of Materials Consumed	6,517.54	69.10%	4,465.56	66.58%	4,345.49	71.20%
Direct Expense	771.56	8.18%	652.09	9.72%	522.28	8.56%
Changes in Inventories of Work-In- Progress & Finished Goods	(63.79)	(0.68%)	19.52	0.29%	135.44	2.22%
Employee Benefits Expenses	397.54	4.22%	398.78	5.95%	390.99	6.41%
Finance Costs	175.73	1.86%	135.27	2.02%	95.43	1.56%
Depreciation & Amortisation Expenses	252.85	2.68%	173.05	2.58%	138.09	2.26%
Other Expenses	212.16	2.25%	176.00	2.62%	163.46	2.68%
Total Expenses (B)	8,263.59	87.62%	6,020.27	89.76%	5,791.18	94.88%
Profit before tax (c) (A-B)	1,167.95	12.38%	687.01	10.24%	312.21	5.12%
Tax Expense/ (benefit)
(a) Current Tax Expense	301.8	3.20%	175.30	2.61%	96.51	1.58%
(c) Deferred Tax	3.46	0.04%	8.26	0.12%	(1.67)	(0.03%)
Total tax expenses (D)	305.26	3.24%	183.56	2.74%	94.84	1.55%
Profit/(Loss) for the year/Period (C-D)	862.69	9.15%	503.45	7.51%	217.37	3.56%

**Total refers to Total Revenue

Components of our Profit and Loss Account

Income

Our total income comprises of revenue from operations and other income.

Revenue from Operation

The Revenue from operations as a percentage of our total income was 98.87%,98.36%, and 99.51% for the Financial Years ended March 31, 2026, March 31, 2025 and March 31, 2024 respectively.

(Amount in Lakhs)

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025	For the year ended March 31, 2024
Sale of Goods	9,281.11	6,558.83	6,049.12
Sale of Services	10.43	20.48	13.43
Other Operating Revenue - Sale of Scrap	33.63	18.22	10.93
TOTAL	9,325.17	6,597.53	6,073.48

Other Income

Our other Income consists of Interest on Deposits, Gain on Foreign Exchange Fluctuation, Discount received, Rental Income, Subsidy from DIC, Reversal of Gratuity provision and Reversal of Leave Encashment provision.

(Amount in Lakhs)

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025	For the year ended March 31, 2024
Interest on Fixed Deposits	0.68	6.98	27.09
Foreign Fluctuation Gain	3.83	-	2.82
Subsidy from DIC	94.18	94.12	-
Rental Income	7.23	0.61	-
Discount Received	-	2.80	-
Reversal of Gratuity provision	-	4.73	-
Reversal of Leave Encashment provision	0.45	0.51	-
TOTAL	106.37	109.75	29.91

Expenditure

Our total expenditure primarily consists of Cost of material consumed, Direct Expenses, Employee benefit expenses, finance costs, Depreciation and Other Expenses.

Cost of material consumed

Our cost of material consumed primarily comprises raw materials required for our operations. It includes the value of opening stock at the beginning of the period, net purchases made during the year, and is adjusted for the closing stock at the end of the period.

Employee Benefit Expenses

Our employee benefits expense comprises of Salaries, Allowance & Bonus, Staff Welfare, Gratuity, Direct Remuneration & Contribution towards Provident fund & ESIC.

Finance costs

Our Finance cost expenses comprise of Bank Charges and processing fees, Interest on Term Loan, Interest on Working Capital Loans, Interest on Unsecured Loans, Interest over late payment of statutory dues and Interest over MSME Creditors.

Other Expenses

Our other expenses primarily comprise of Auditors remuneration, Legal & Professional Fees, Security Charges, Packing & Forwarding Charges, Travelling Expense and Rates & Computer Repairs & Software Expenses etc.

(Amount in Lakhs)

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025	For the year ended March 31, 2024
Audit Remuneration*	6.33	1.23	0.86
Directors Sitting Fees	1.00	1.60	-
Insurance Expense	18.82	16.69	17.22
Legal & Professional Fees	36.16	37.24	17.30
Office Expense	17.84	5.33	5.05
Security Charges	18.73	13.07	8.89
Packing & Forwarding Charges	17.56	16.20	11.10
Rent, Rates & Taxes	6.03	9.05	2.76
Sales Promotion Expense	15.28	1.72	1.44
Telephone & Postage Charges	7.40	6.10	4.87
Computer Repairs & Software Expenses	-	6.66	4.21
Travelling Expense	40.57	32.51	25.34
Discount Given	4.96	-	0.59
Provision for Warranty Claim	12.14	27.86	63.83
CSR expenses	9.34	-	-
Foreign Fluctuation Loss	-	0.74	-
Total	212.16	176.00	163.46

Provision for Tax

The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

Fiscal 2026 compared with Fiscal 2025

Revenue from Operations

The Revenue from Operations of our company for Fiscal year 2026 was 9,325.17 Lakhs against 6,597.53 Lakhs for Fiscal year 2025. An increase of 41.34% in revenue from operations. This increase was due to higher sales volumes driven by strong demand from existing customers, addition of new customers, improved product mix across the Lighting and Motor divisions, enhanced capacity utilization at the Companys manufacturing facilities and increased contribution from the Companys Original Brand Manufacturing (OBM) business. The growth was further supported by operational efficiencies, strengthened customer relationships and higher order execution during the year.

Other Income

The other income of our company for fiscal year 2026 was 106.37 Lakhs against 109.75 for Fiscal year 2025. The decrease of 3.08% in other income. This decrease was due to lower interest income and other incidental non-operating income during the year. However, the impact was substantially offset by continued recognition of government subsidy and other miscellaneous income.

Total Income

The total income of the company for fiscal year 2026 was 9,431.54 Lakhs against 6,707.28 Lakhs of total income for Fiscal year 2025 with an increase of 40.62% in total income. This increase was primarily due to the significant growth in revenue from operations driven by higher sales volumes from the Companys Lighting and Motor divisions, increased business from existing customers, addition of new customers, improved product mix, enhanced capacity utilisation across its manufacturing facilities and higher execution of customer orders during the year. The increase in total income was primarily driven by operational performance, while other income remained largely stable during the year.

Expenditure

Cost of material consumed

In Fiscal 2026, cost of material consumed were 6,517.54 Lakhs against 4,465.56 Lakhs of Cost of material consumed in fiscal 2025. An increase of 45.95%. This increase was due to higher production and sales volumes in line with the growth in revenue from operations. The increase was further driven by changes in product mix, higher consumption of raw materials to support increased order execution, and the impact of fluctuations in the prices of certain key raw materials during the year.

Direct Expenses

In Fiscal 2026, the Company incurred Direct expenses of 771.56 Lakhs against 652.09 Lakhs of Direct expenses in fiscal 2025. An increase of 18.32%. This increase was due to higher manufacturing and operational activities undertaken to support the increased production and sales volumes during the year. The increase was partially offset by improved operational efficiencies and effective cost management initiatives.

Changes in inventories of finished goods, work in progress and stock in trade

In Fiscal 2026, the Changes in Inventories of Work-in-Progress & Finished Goods amounted to -63.79 Lakhs against 19.52 Lakhs in fiscal 2025. In Fiscal 2026, the Changes in Inventories of Work-in-Progress and Finished Goods amounted to ( 63.79 Lakhs) as compared to 19.52 Lakhs in Fiscal 2025. The variation was primarily attributable to higher closing inventories of work-in-progress and finished goods as at the end of Fiscal 2026, reflecting increased production in line with higher business volumes and timing differences in dispatches of finished goods during the year

Employee Benefit Expenses

In Fiscal 2026, the Company incurred employee benefit expenses of 397.54 Lakhs against 398.78 Lakhs expenses in Fiscal 2025. This decrease of 0.31% was due to improved manpower productivity and operational efficiencies achieved during the year, despite a significant increase in the scale of operations. The Company continued to optimize its workforce deployment and production processes, resulting in stable employee costs while supporting higher business volumes.

Finance Costs

The finance costs for the Fiscal 2026 were 175.73 Lakhs while it was 135.27 Lakhs for Fiscal 2025. An increase of 29.91%. This increase was due to higher utilization of working capital borrowings to support the increased scale of operations and business growth during the year. The increase was also impacted by higher interest costs associated with working capital facilities and trade-related financing.

Other Expenses

In Fiscal 2026, our other expenses were 212.16 Lakhs and 176.00 Lakhs in Fiscal 2025. An increase of 20.55%. This increase was due to higher operational and administrative expenses incurred in line with the expansion of business activities, increased production volumes and continued investments in business operations during the year.

Profit before Tax

Our Company had reported a profit before tax for the Fiscal 2026 of 1,167.95 Lakhs against profit before tax of 687.01 Lakhs in Fiscal 2025. An increase of 70.00%. This increase was primarily driven by significant growth in revenue from operations, improved operating leverage arising from higher capacity utilisation, better product mix, operational efficiencies, and effective cost management initiatives, which collectively resulted in enhanced profitability during the year.

Profit after Tax

Profit after tax for the Fiscal 2026 were at 862.69 Lakhs against profit after tax of 503.45 Lakhs in fiscal 2025, An Increase of 71.36%. This increase was primarily driven by strong growth in revenue from operations, improved operating margins through enhanced operational efficiencies and better cost optimisation, resulting in higher overall profitability during the year.

Fiscal 2025 compared with fiscal 2024

Revenue from Operations

The Companys Revenue from Operations increased from 6,073.48 lakhs in Fiscal 2024 to 6,597.53 lakhs in Fiscal 2025, representing a growth of 8.63%.

The increase was primarily attributable to higher demand for automotive components from the Companys existing customers, supported by growth in the automotive sector. Revenue from the Companys top 10 customers increased from 5,876.42 lakhs in Fiscal 2024 to 6,342.26 lakhs in Fiscal 2025, representing an increase of 465.84 lakhs, which significantly contributed to the overall growth in revenue. Further, the Company commenced commercial supplies of certain products that were developed and approved during the preceding years, resulting in higher sales volumes during Fiscal 2025. The operationalization of Plant-1 also enhanced the Companys manufacturing capacity and enabled it to cater to increased customer requirements more effectively. Additionally, the Company has also focused on strengthening its marketing efforts in Fiscal 2025 onwards by providing training to its marketing personnel to improve market reach and enhance customer acquisition. The Company’s strength lies in its ability to design and develop automotive components as per customer requirements, which helps the Company not only retain its existing market share but also gradually increase its presence with existing customers and to develop business relations with new customers.

Other Income

The other income of our company for fiscal year 2025 was 109.75 Lakhs against 29.91 for Fiscal year 2024. The increase of 266.93 % in other income. This increase was due to on account of recognition of subsidy income during the year, along with increase in interest income on deposits and other ancillary income, as compared to the previous fiscal year.

Total Income

The total income of the company for fiscal year 2025 was 6,707.28 Lakhs against 6,103.39 Lakhs of total income for Fiscal year 2024 with an increase of 9.89% in total income. This increase was due increase was primarily driven by growth in revenue from operations, supported by improved performance across key business segments, along with higher other income during the year.

Expenditure

Cost of material consumed

In Fiscal 2025, cost of material consumed were 4,465.56 Lakhs against 4,345.49 Lakhs of Cost of material consumed in fiscal 2024. An increase of 2.76%. This increase was due to primarily in line with the growth in revenue from operations, reflecting higher production volumes during the year. The relatively moderate increase indicates improved material efficiency and better cost management as compared to the previous fiscal year.

Direct Expenses

In Fiscal 2025, Direct Expenses of our company was 652.09 Lakhs against 522.28 Lakhs of Purchase Stock-in-Trade in fiscal 2024. An increase of 24.85%. This increase was due to higher operational activity and increased production volumes during the year, leading to a corresponding rise in direct manufacturing and processing expenses.

Changes in inventories of finished goods, work in progress and stock in trade

In Fiscal 2025, the Changes in Inventories of Work-in-Progress & Finished Goods amounted to 19.52 Lakhs against 135.44

Lakhs in fiscal 2024. The higher impact in Fiscal 2024 was primarily due to significant reduction in finished goods inventory levels, as the Company utilized previously accumulated stock. In contrast, during Fiscal 2025, the movement in inventory levels was relatively moderate due to lower opening finished goods inventory and more balanced production and sales during the year.

Employee Benefit Expenses

In Fiscal 2025, the Company incurred employee benefit expenses of 398.78 Lakhs against 390.99 Lakhs expenses in fiscal 2024. An increase of 1.99%. This increase was due to marginal increase was primarily attributable to normal annual increments and employee cost rationalization, while overall manpower costs remained largely stable in line with the Company’s operational requirements.

Finance Costs

The finance costs for the Fiscal 2025 were 135.27 Lakhs while it was 95.43 Lakhs for Fiscal 2024. An increase of 41.75%.

This increase was due to higher utilization of working capital borrowings and term loans to support the growth in operations. Additionally, the increase was impacted by higher finance charges relating to unsecured borrowings and other financing costs during the year.

Depreciation & Amortization Expenses

Depreciation & Amortization Expenses for the Fiscal 2025 were 173.05 lakhs while it was 138.09 lakhs for Fiscal 2024. This increase was due to addition of property, plant and equipment during the year, in line with the Company’s capacity expansion and operational requirements.

Other Expenses

In fiscal 2025, our other expenses were 176.00 Lakhs and 163.46 Lakhs in fiscal 2024. An increase of 7.67%. This increase was due to higher operational and administrative expenses in line with the overall growth in business activities during the year.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2025 of 687.01 Lakhs against profit before tax of 312.21 Lakhs in Fiscal 2024. An increase of 120.05%. This increase was due to primarily driven by growth in revenue from operations, improved operating efficiencies, and better absorption of fixed costs. The profitability was also supported by recognition of subsidy income during the year.

Profit/ (Loss) after Tax

Our Company had reported a profit after tax for the Fiscal 2025 of 503.45 Lakhs against profit after tax of 217.37 Lakhs in Fiscal 2024. An increase of 131.61%. From Fiscal 2025 onwards, the Company opted for taxation under Section 115BAA of the Income-tax Act, 1961, which reduced the applicable corporate tax rate from 25% to 22% (plus applicable surcharge and cess). Consequently, the Company’s effective tax rate reduced to approximately 26.7% in Fiscal 2025. Accordingly, the combined impact of improved operating margins and a lower effective tax rate resulted in a significant increase in Profit After Tax during Fiscal 2025 and the subsequent period.

Cash Flows

(Amount in lakhs)

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025	For the year ended March 31, 2024
Net Cash Flow from/ (used in) Operating Activities	195.40	264.11	349.51
Net Cash Flow from/ (used in) Investing Activities	(579.37)	(646.00)	(840.78)
Net Cash Flow from/ (used in) Financing Activities	394.12	144.04	498.10

Cash Flows from Operating Activities

1. For the year ended March 31, 2026, net cash flow from operating activities was 195.40 Lakhs. This comprised of the net profit before tax of 1,167.95 Lakhs, which was primarily adjusted for Depreciation and Amortization expense of 252.85 Lakhs, Interest Cost of 158.77 Lakhs, Reversal of Leave Encashment provision of 0.45 Lakhs, Gratuity Provision of 0.97 Lakhs, Interest Income Earned of 0.68 Lakhs, Subsidy of 94.18 Lakhs, Discount Given of 4.96 Lakhs, Provision for warranty claim of 12.14 Lakhs and Unrealised Foreign Exchange gain of 3.77 Lakhs. The resultant operating profit before working capital changes was 1,498.56 Lakhs, which was primarily adjusted for an increase in Trade Receivables of 839.38 Lakhs, increase in Inventories of 549.84 Lakhs, increase in Loans and Advances of 16.35 lakhs, decrease in Other Assets of 43.59 Lakhs, increase in Trade Payables of 461.28 Lakh and decrease in Other Liabilities & Provision of 21.23 Lakhs

Cash generated from operations before extraordinary item & tax was 576.63 Lakhs, which was further reduced by direct tax paid for 381.23 Lakhs, resulting into net cash flow used in operating activities of 195.40 Lakhs.

2. For the year ended March 31, 2025, net cash flow from operating activities was 264.11 Lakhs. This comprised of the net profit before tax of 687.01 Lakhs, which was primarily adjusted for Depreciation & Amortization expense of 173.05 Lakhs, Interest Cost of 133.53 Lakhs, Interest income earned of 6.98 Lakhs, Reversal of gratuity provision of 4.73 Lakhs, Reversal of Leave Encashment provision of 0.51 Lakhs, Subsidy of 94.12 Lakhs, Discount given of 2.80 Lakhs, Provision for warranty claim of 27.86 Lakhs and Unrealised Foreign Exchange loss of 0.70 Lakhs. The resultant operating profit before working capital changes was 912.96 Lakhs, which was primarily adjusted for an increase in Trade Receivables of 409.94 Lakhs, increase in Inventories of 413.96 Lakhs, increase in Loans and Advances of 43.81 lakhs and decrease in Other Assets of 44.92 Lakhs, increase in Trade Payables of 215.30 Lakh, increase in Other Liabilities of 85.53 Lakhs.

Cash generated from operations before extraordinary item & tax was 391.00 Lakhs, which was further reduced by direct tax paid for 126.89 Lakhs, resulting into net cash flow from operating activities of 264.11 Lakhs.

3. For the year ended March 31, 2024, net cash flow from operating activities was 349.51 Lakhs. This comprised of the net profit before tax of 312.21 Lakhs, which was primarily adjusted for Depreciation & Amortization expense of 138.09 Lakhs, Interest Cost of 87.36 Lakhs, Interest income earned of 27.09 Lakhs, Gratuity provision of 11.11 Lakhs, leave enhancement provision of 0.12 Lakhs, Discount received of 0.59 Lakhs, Provision for warranty claim of 63.83 Lakhs and Unrealised Foreign Exchange gain of 0.21 Lakhs. The resultant operating profit before working capital changes was 585.41 Lakhs, which was primarily adjusted for an increase in Trade Receivables of 258.22 Lakhs, decrease in Inventories of 144.01 Lakhs, decrease in Loans and Advances of 56.11 lakhs, decrease in Other Assets of 17.16 Lakhs, decrease in Trade Payables of 138.50 Lakh, increase in Other Liabilities & provision of 36.41 Lakhs.

Cash generated from operations before extraordinary item & tax was 442.38 Lakhs, which was further reduced by direct tax paid for 92.87 Lakhs, resulting into net cash flow from operating activities of 349.51 Lakhs.

Cash Flows from Investment Activities

1. For the year ended March 31, 2026, net cash used in investing activities was 579.37 Lakhs, which primarily comprised of cash used for purchase of property, plant & equipment & intangible asset (including capital advances) of 580.05 Lakhs and Interest income received of 0.68 Lakhs.

2. For the year ended March 31, 2025, net cash used in investing activities was 646.00 Lakhs, which primarily comprised of cash used for purchase of property, plant & equipment & intangible asset (including capital advances) of 652.98 Lakhs and Interest income received of 6.98 Lakhs.

3. For the year ended March 31, 2024, net cash used in investing activities was 840.78 Lakhs, which primarily comprised of cash used for purchase of property, plant & equipment & intangible asset (including capital advances) of 867.87 Lakhs and Interest income received of 27.09 Lakhs.

Cash Flows from Financing Activities

1. For the year ended March 31, 2026, net cash flow from financing activities was 394.12 Lakhs, which primarily comprised of

Repayment of borrowing of 378.67 Lakhs, Finance cost paid of 126.00 Lakhs and Proceeds from borrowings of 898.79 Lakhs.

2. For the year ended March 31, 2025, net cash flow from financing activities was 144.04 Lakhs, which primarily comprised of Proceeds from Borrowing of 374.93 Lakhs, Repayment of borrowing of 132.67 Lakhs and Finance cost paid of 98.22 Lakhs.

3. For the year ended March 31, 2024, net cash flow from financing activities was 498.10 Lakhs, which primarily comprised of Proceeds from Borrowing of 615.44 Lakhs, Repayment of borrowing of 57.98 Lakhs and Finance cost paid of 59.36 Lakhs.

The Companys short-term borrowings primarily comprise a cash credit facility from banks, unsecured loans from Directors and related parties, and current maturities of term loans. The increase in short-term borrowings from 765.50 lakhs in Fiscal 2024 to 1,063.12 lakhs in Fiscal 2025 and further to 1,741.93 lakhs in Fiscal 2026 was primarily driven by the growth in business operations and the corresponding increase in working capital requirements.

OTHER MATTERS

1. Unusual or infrequent events or transactions

Except COVID-19 or any such kind of pandemic and as described in this Red Herring Prospectus, there have been no other events or transactions to the best of our knowledge which may be described as "unusual" or "infrequent".

2. Significant economic changes that materially affected or are likely to affect income from continuing Operations

Other than as described in the Section titled "Financial Information" and chapter titled "Management’s Discussion and Analysis of Financial Conditions and Results of Operations," beginning on Page 189 and 196 respectively of this Red Herring Prospectus, to our knowledge there are no significant economic changes that materially affected or are likely to affect income from continuing Operations.

3. Known trends or uncertainties that have/had or are expected to have a material adverse impact on revenue or income from continuing operations

Apart from the risks as disclosed under Chapter titled "Risk Factors" beginning on page no. 22 in this Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known

Our Company’s future costs and revenues will be determined by demand/supply situation, both of the end services as well as the government policies and other economic factor.

5. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or increased sales prices.

Increases in revenues are by and large linked to increases in volume of business and also dependent on the price realization on our products/services.

6. Total turnover of each major industry segment in which the issuer company operated.

Relevant Industry data and, as available, has been included in the chapter titled "Industry Overview" beginning on page no. 102 of this Red Herring Prospectus.

7. The extent to which business is seasonal.

Our business is dependent to a certain extent on the seasonal, environmental and climate changes. Hence, our business is seasonal in nature.

8. Any significant dependence on a single or few suppliers or customers

Our business is dependent on few clients. Our top 10 customers contributed 95.49%, 96.40% and 96.93% of revenue from operations F.Y. ending on 2025-26, 2025-24 and 2024- 23 respectively.